Overview
Despite their diversity, global healthcare systems are increasingly converging in the need and desire to contain costs of healthcare, and especially those associated with pharmaceuticals. At the same time, Big Pharma are having to contend with a dearth of invention, patent expirations, and increased generic competition, among other factors undermining their profits. In this environment, the importance of market access strategies, especially in terms of pricing, reimbursement and parallel trade are rapidly gaining prominence.
Pharmaceutical Pricing, Reimbursement and Parallel Trade 2006 examines the key issues that need to be addressed by pharmaceutical and biotechnology companies alike in order to successfully achieve return on investment. The American, European and Japanese markets are undergoing constant harmonisation changes, which are leading to a globalisation of operating procedures and state intervention in healthcare and drug cost containment. This trend has an important impact on the overall environment facing the drug and biotechnology
industry � on the one hand, facilitating access to a wider patient base but, on the other, raising the stakes of key pricing and reimbursement decisions.
Pricing can no longer be considered separate to reimbursement, while parallel trade threatens to undermine companies� wider regional efforts to achieve the best price for their products. Lifecycle management issues increasingly involve tailor-made medicines, pharmacogenomics and similar disciplines, as well as greater co-operation within the industry and outside its boundaries. This report examines these issues in great detail and helps the reader navigate this increasingly complex field.
Pharmaceutical Pricing, Reimbursement and Parallel Trade 2006 provides the following:
- An overview of major market access strategies
- In-depth information regarding the pricing environments of the American, European and Japanese pharmaceutical markets, comparing and contrasting their major features with a view to securing the best approach
- In-depth information regarding reimbursement environments and market strategies that are most suitable for a particular market
- Overview of parallel trade, including major responses to the threat by all relevant players
- Overview of lifecycle management, identifying key factors for successful product placement over time
- Examination of Latin American experience in terms of pricing strategies and lessons that can be learned globally
Table of Contents
1 Executive Summary, Report Objectives and Scope
1.1 Executive Summary
1.2 Report Objectives and Scope
2 Introduction
2.1 Pharmaceutical and Biotechnology Industries: Brothers in Need
Case Study: Biotech-Biotech Take-Over Deal - Amgen and Immunex
2.1.1 Pipeline Problems
2.1.2 Big Pharma’s Image under Attack
2.1.3 The Secret Price of Drugs
2.2 Biotechnology as an Equal Partner
2.2.1 Risk Management Strategies for Biotech Firms
2.2.2 Biotech in Europe
Case Study: The European Biotechnology Patents Directive
2.2.3 The One That Can: Amgen, the Most Successful Biotech Company
3 Key Issues Affecting Global Pharmaceutical and Biotechnology Industries
3.1 Pharmaceuticals: Strength in Numbers
3.2 Pharmaceuticals: The Medical Needs/Financial Means Gap
3.3 Pharmaceuticals: The Public Voice
3.4 Pharmaceuticals: Big Names in Pharma Business
3.5 Biotechnology: What’s Hot and What’s Not
3.6 Key Markets: The US, Japan, Europe
3.6.1 The Awesome Threesome: The US
3.6.2 The Awesome Threesome: Japan
3.6.3 The Awesome Threesome: The EU
4 Market Entrance Strategies - General Overview
Minority equity investment
Consortium
Outsourcing
Partnerships and R&D partnering
Niche market launches
New blockbuster therapy
Me-too drugs
Not launching or delaying launches
Marketing and promotion
Full reimbursement versus lower prices or restrictions on prescribing
Launching without reimbursement
Sequence of launch
Licensing
Orphan drug status
Acquisition
Mergers
Price corridors
Generic market entry
Patent extension, data exclusivity and market protection
Prescription to OTC switching
Case Study: Biotechnology Commercialisation Agreement - Innovex and CVT
Case Study: Launching Without Reimbursement - Aricept
Case Study: AstraZeneca and Atherogenics Licensing Deal
Case Study: Aspreva and Rare Disease Research
Acquisition Case Study: Novartis and Lek
Case Study: the US - Pfizer and Pharmacia Merger
Case Study: Europe: Aventis and Sanofi-Synthelabo Merger
Case Study: Japan: Daiichi and Sankyo Merger
Case Study: Supplementary Protection Certificates and Data Exclusivity in Europe
5 An Introduction to Pricing and Reimbursement
5.1 The Basics of Pricing
5.2 Elements of Pricing
5.3 Strategic Pricing
5.4 Pharmacogenomics and Pricing Ramifications
Case Study: Pharmacogenomics in the UK’s NHS
6 Pricing/Reimbursement in the US
6.1 US Healthcare System - Overview
6.2 Medicare
6.3 Medicaid
6.4 Federal Healthcare Budget
6.5 Recent Developments
6.6 Pricing in the US
6.6.1 Price-Fixing
6.6.2 State-Specific Pricing Policies
6.6.2.1 Price Controls in Maine
6.6.2.2 Florida’s Medicaid Drug Rebates
6.7 Pricing in the US: Market Entrance Strategies
6.8 Reimbursement in the US: Present Climate and Conditions
6.9 Reimbursement in the US: Market Entrance Strategies
7 Pricing/Reimbursement in Japan - Overview
7.1 Pricing in Japan
7.2 Pricing in Japan: Market Entrance Strategies
7.3 Reimbursement in Japan: Present Climate and Conditions
7.4 Reimbursement in Japan: Market Entrance Strategies
8 Pricing in the EU: Present Climate and Conditions - Overview
8.1 Price Controls
8.1.1 Supply Side
8.1.2 Demand Side
8.2 EU Enlargement
8.3 Pricing in Europe: Market Entrance Strategies
8.4 Reimbursement in the EU: Present Climate and Conditions - Overview
8.5 Reimbursement Strategies
8.6 Reimbursement in Europe: Market Entrance Strategies
8.7 Pricing/Reimbursement in Select EU Countries
8.7.1 Pricing in the UK
8.7.2 Reimbursement in the UK
8.7.3 Pricing in France
8.7.4 Reimbursement in France
8.7.5 Pricing in Germany
8.7.6 Reimbursement in Germany
8.8 Pricing and Reimbursement in Other EU Countries
8.8.1 Pricing and Reimbursement - Spain
8.8.2 Pricing and Reimbursement - Italy
8.8.3 Pricing and Reimbursement - Greece
8.8.4 Pricing and Reimbursement - Portugal
8.8.5 Pricing and Reimbursement - Poland
8.8.6 Pricing and Reimbursement - Hungary
8.8.7 Pricing and Reimbursement - The Czech Republic
9 Parallel Trade
9.1 Definition
9.2 Reasons for Parallel Trade
9.2.1 The Cost-Cutting Rationale
9.2.2 Principles of Free Trade
9.2.3 Disparate Regulatory and Intellectual Property Environments
9.3 Who Benefits from Parallel Trade?
10 Parallel Trade in the US: Canadian Re-importation
10.1 Re-importation into the US - The Desire to Save
10.2 Re-Importation into the US - Patent Rights
10.3 Re-Importation into the US - Legislative Support
10.4 Reasons for Parallel Trade from Canada
10.5 Company Opposition
10.6 State Actions
10.7 Patients’ Involvement
10.8 FDA Response
10.9 Potential Savings
11 Parallel Trade in Europe
11.1 Single Market and Parallel Trade
11.2 EU PT Market Figures
11.3 EU Enlargement
11.4 Parallel Trade and EU Enlargement
11.5 Parallel Trade and the Euro
11.6 How to Stop Parallel Trade
11.7 Legal Examples of Parallel Trade Disputes
11.7.1 Pharmaceutical Repackaging: Aventis’ Insuman
11.7.2 Repackaging: Boehringer Ingelheim & Others v. Swingward and Dowelhurts
11.7.3 Trademarks: Pharmacia & Upjohn SA v. Paranova A/S
11.7.4 Market Authorisation Withdrawal: Ferring v. Eurim-Pharm and Paranova
11.7.5 Common Origin: Germany v. Kohlpharma
11.7.6 Stock Management: Bayer and Adalat
11.8 A Single European Price?
Case Study: Single European Price for Merck’s Crixivan
12 Regional Lessons for Pharmaceutical Pricing
12.1 Regional Pricing: Latin American Examples
13 Conclusion: The Lessons Learnt
13.1 Pricing - Global Lessons
13.2 Reimbursement - Essential Market Access Factor
13.3 R&D - Continued Need for Innovation
13.4 Globalisation of the Pharmaceutical Market
13.5 Future Considerations
13.5.1 Development of New Markets
Case Study: Bird Flu
13.5.2 Discoveries in Technology and Genetics
13.5.3 Bioterrorism, New Diagnostics
13.5.4 Lifecycle Management
13.6 Closing Remarks
Glossary
Tables
Table 2.1 Total and On-Patent Drug Revenues for Selected Organisation for Economic Co-Operation and Development (OECD) Countries
Table 2.2 Total and Off-Patent Drug Revenues for Selected OECD Countries
Table 2.3 Key Off-Patent Drugs
Table 2.4 World’s Largest Biotech Companies by Sales, 2005
Table 2.5 World’s Largest Healthcare Companies by Sales of Biotech Products, 2003
Table 2.6 Amgen’s Financial Statement Figures
Table 3.1 Big Pharma by Sales
Table 3.2 Top Products, October 2005
Table 3.3 Retail Medicine Sales by Main Markets, 12 Months to November 2005
Table 3.4 Promotional Expenditure in Select EU Countries, 2003
Table 4.1 FDA Orphan Drugs - Products Designated as Orphan Drugs, September 2005 to December 2005
Table 6.1 OECD Health: Spending and Resources (2003 Figures)
Table 6.2 US Online Advertising Spending by Major Industry Category as a of Total Online Ad Spending
Table 6.3 Marketing and R&D Costs by Major Pharmaceutical Companies, 2003
Table 8.1 Pharmaceutical Sales and Growth by Value
Table 8.2 European Reference Pricing Situation
Table 8.3 Overview of Supply-Side Pricing and Reimbursement in the Old EU
Table 8.4 Overview of Demand-Side Pricing and Reimbursement in the Old EU
Table 8.5 Estimated Pharmaceutical Market Value by Country, 2005
Table 9.1 Parallel Trade Benefits and Threats
Table 11.1 Savings Achieved by PT in Select EU Countries
Table 11.2 Share of Parallel Imports as of Total Pharmaceutical Market, 1998, 2000, 2002
Table 11.3 Share of Parallel Imports as % of Total Pharmaceutical Market, 1997, 1999
Table 11.4 National Policies Regarding Parallel Import Drugs in Europe, 2004
Table 11.5 Pros and Cons of Single and Decentralised Pricing Strategies 2002
Table 12.1 Antiretroviral Therapy Coverage in the Developing Countries, December 2002
Graphs
Graph 2.1 Average R&D Expenses of Major Pharmaceutical Companies in Japan and the US
Graph 3.1 Geographical Breakdown of Retail Medicine Sales by Main Markets
Graph 3.2 Pharmaceutical Sales in the New EU
Graph 4.1 European Price Corridor Strategy
Graph 8.1 Main EU Markets, 2004
Graph 11.1 Average Pharmaceutical Price per Tablet, 19 Leading Molecules
Graph 11.2 Shortcomings of a One-Price Policy
Graph 12.1 Cumulative Number of Reported HIV/AIDS Cases in the WHO European Region
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